TIOL-DDT 1099 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1099</font><br> 29.04.2009<br> Wednesday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Import of waste paper – DGFT says Customs will carry out more physical examination</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> reported in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8855" target="_blank">DDT-1085–06-04-2009</a></strong>, there is a conflict of interests - while the import is free as per FTP, there is a condition prescribed under the <em>Hazardous Material Rules</em>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now DGFT clarifies that the applications submitted to the M/o Environment & Forests for NOC are to be accompanied by the certificate of an independent pre-shipment inspection agency for consignments which are shipped after 25.4.2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To ensure that no unwanted material is imported under the garb of waste paper during this interim period (till the consignments are received along with pre-shipment inspection certificate), Customs <strong>would </strong> carry out a higher percentage physical examination of imported cargo, than normally prescribed by them under the rules. The consignments shipped on or after 25.4.2009, which do not have the requisite pre-shipment inspection certificate, shall not be allowed to be unloaded at the Indian ports.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT circular says the Customs <strong>WOULD </strong> carry out a higher percentage physical examination. Does it mean the Customs <strong>will </strong> examine from today or they should have done it long ago? ‘ <strong>Would' </strong> is perhaps the past tense of ‘ <strong>will'</strong>. Now <strong>will </strong> the Customs, or <strong>would </strong> the customs examine?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And who is the DGFT to decide that Customs <strong>would </strong> examine, not that Customs officers will be unwilling to do examination? And how do you examine containers of waste paper in a port or Customs Station?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a case sometime back when a sample of imported waste paper contained very good quality writing paper. The importer stated that he had ordered for waste paper only to be made into pulp in his paper factory and what the Customs thought was good quality paper must have been treated as waste by the foreign supplier. Even in a huge port it was not possible for the Customs to unload all the containers and pick out the good paper. The good Commissioner had a brilliant idea. He ordered that the unloading at the factory end should be under the physical supervision of the Jurisdictional Central Excise superintendent, who was to ensure that the good quality paper is torn into pieces in his presence. <font color="#FF6600">Imagine the plight of this superintendent who was depending on this assessee for supply of white papers to his office – even for writing the Show Cause Notices to the same very assessee. And here he was supervising destruction of good quality writing paper.</font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2008/dgft08cir082.htm" target="_blank">DGFT Policy Circular No. 82(RE-08)/2004-2009 Dated: April 28, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">External Commercial Borrowings (ECB) Policy – Liberalisation extended till year end</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was decided to dispense with the requirement of all-in-cost ceilings on ECB, under the approval route, until June 30, 2009. Accordingly, eligible borrowers, proposing to avail of ECB beyond the prescribed all-in-cost ceilings could approach the Reserve Bank, under the approval route.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Considering the continuing pressure on credit spreads in the international markets, it has been decided to extend the relaxation in all–in-cost ceilings, under the approval route, until December 31, 2009. This relaxation will be reviewed in December 2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Necessary amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 dated May 3, 2000 are being issued separately.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The directions have been issued under sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI A.P. (DIR series) Circular No. 64 Dated: April 28, 2009</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">NACEN </font></strong><font color="#006600"><strong> –Custom's Premier Academy not able to spend money allotted to it</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You think Government Departments are white elephants constantly engaged in wasting your money? The fact is many of the Departments do not know how to spend the money given to them.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Look at NACEN – National Academy of Customs Excise and Narcotics, the premier Academy which is considered to be a centre of excellence. As if the money allotted to it was not enough, it got sanctioned an additional amount of Rs. 2.15 Crores, but at the end of the year, it had an unspent amount of Rs. 5.17 Crores. The Academy could not spend even the Rs. 3 Crores it had as surplus and it got an additional grant of over Rs. 2 Crores.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Directorate of Publicity and Public Relations (Customs and Central Excise) got Rs. 26.41 Crores out of which they could only spend Rs. 8.37 Crores leaving an unspent amount of Rs. 18.04 Crores. We in TIOL have given them a lot of free publicity – How I wish they could have given us some ads out of the money they could not spend.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs and Central Excise Department had a hundred Crores for Preventive and other functions out of which they could spend only Rs. 27.42 Crores leaving an unspent amount of Rs. 72.58 Crores.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They were given Rs. 15 Crores for buying Ready Built Flats, out of which they could only spend a paltry 2.62 Crores. Totally the Indirect Taxes department was not able to spend Rs. 113.42 Crores given to it. Just imagine the change it would have brought in had this money been spent.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All this information is from the latest report of the CAG to the President – the first Report for the year 2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You go to any Customs or Central Excise office in the country – you find the senior officers have swanky air-conditioned rooms, some of which are more posh than the room of the Finance Minister. Every time a Commissioner or Chief Commissioner joins, everything from carpet to computer is changed. We were told that recently a Commissioner re-decorated his room at a cost of nearly Rs 5 Lakhs ! – You go to this Commissionerate – there is no place for visitors to sit, no drinking water facility – of course there is a tap, but no tumbler. The other day I saw a retired Member of the CBEC sweating outside a Commissioner's room.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And they have no money to subscribe to ELT or TIOL which would actually help them win cases and increase their Revenue. The cost for this would be peanuts compared to the money they spend lavishly to project an image before the public that they are not servants of the citizens but princes who are there to enjoy the good things of life, with hardly any responsibility.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department was not able to spend Rs. 113.42 Crores! With half that money they could have provided a laptop, cell phone and internet connection to all the officers from Inspector and above with subscription to ELT and TIOL and the results would have been amazing.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other day, an assessee told DDT that he went to file the service tax returns and found nearly 14 to 15 officers sitting in cramped office space of less than 400 sft and there was no place to move for the number of assessees who came to file the returns including ladies who had to jostle through the little space to reach thier officer. When so much of funds are available, why can't they spend it on such essential requirements?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NACEN could not spend Rs. 5 Crores – with half that money they could have provided the best training. Even I have lost in that non-spending. They used to invite me to give lectures, but of late they seem to have blacklisted me.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">–</font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Tomorrow's cases</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">'Business Auxiliary Service' - Production of goods </font></strong><font color="#FF6600"><strong><em>on behalf </em> of client Vs Production of goods <em>for client</em>:</strong></font></font></p> <p align="justify"><br> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> dispute is whether the two terms namely, ‘ <em>production of goods for the client' </em> and ‘production <em> of goods on behalf of the client' </em> convey the same meaning or whether they refer to two different situations. If the answer is ‘No', then services rendered ‘for the client' before June 16, 2005, would not be taxable.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Indian company seconds employee to non-resident JV - salary paid by non-resident company - Since secondee stayed in India for less than 180 days during relevant FY, his income is not taxable in India: ITAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> more and more Indian companies setting up JVs, subsidiaries and buying out existing companies in virtually all the continents across the globe, what has also become a common practice is that of deputation of Indian personnel to some of these stations. Now the question that arises is that can such personnel be treated as employees of the Indian companies during the period of their deputation? Is their income taxable in India? In an interesting ruling in the case of an employee of the ONGC the ITAT has held that since the secondee lived for less than 180 days during the relevant financial year and was on deputation with the JV, a non-resident company, which paid the salary to the secondee , such income of the assessee is exempt from tax in India.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Import of photocopiers - There is no material on record (except information from website pertaining to a different mode) to enhance value: Revenue Appeal dismissed: Supreme Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no material on record (except the information from the website pertaining to a different mode) to enhance the value. <strong> – </strong>The year of manufacture is not available. The year of comparable imports as alleged is not available. The website information is in respect of some other model of photocopying machines; no infirmity in the order passed by the Tribunal</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns tomorrow for the judgements</font></strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>